The ETRM/CTRM software category comprises a wide range of solutions, from those that attempt to cover multiple commodities, broad functionality and geographies to those that are specialized point solutions. A few years ago, ComTech wrote a paper about this entitled “CTRM as an Architecture” and recently followed it up with a CTRMRadio edition looking at this issue again. For buyers, the dilemma is often about procuring a single integrated solution suite versus seeking best-in-class functionality for a specific use case. The first can be pricey, deliver much more than is required and yet still be missing deep commodity-specific functionality — therefore requiring enhancements or additional software and, very often, spreadsheets. The latter approach can result in an integration issue if trading multiple commodities. Of course, for commodity players focused on a single commodity or commodity group, the specific solution is always the way to go.
An additional consideration of the issue these days is the growing importance of the supply chain. For many commodities, a profitable trade can be made unprofitable by supply chain issues such as late delivery, specification penalties, higher than estimate costs and so on. The geopolitical environment in place right now, including sanctions, tariffs, threats of tariffs and Brexit, can only have the potential to disrupt supply chains still further and expose commodity traders to increased risks around supply, logistics, origination and much more. Finding an E/CTRM that also supports much of the supply chain functionality for a specific commodity or, indeed, multiple commodities, simply increases the complexity of an already complex procurement exercise.
These were some of the issues that I recently discussed with Inatech’s management team. Inatech is a Glencore-owned vendor that supplies cloud-based ETRM and fuel management software for the physical oil trading and marine industries. Its view is that achieving a positive margin in the current market is increasingly dependent upon optimizing supply chains and improving efficiencies. Simply put, it’s no longer just about capturing a trade, settling and invoicing it, but about dealing with complex pricing, accurate hedging, efficient transportation, optimal cost routing, speed of providing required documentation for insurance companies and banks, optimal inventory levels, and so on. Inatech’s Techoil ETRM product is a cloud-based solution that delivers domain-specific functionality along with supply chain coverage. As with all newer vendors, it has benefited from being able to apply modern technologies in delivering the solution, and therefore an intuitive UI, workflow, audit trail and cloud delivery are all things it is able to achieve in a ‘native’ sense. As stated in a recent white paper, it is a good example of a focused solution that can be delivered quickly and at a lower cost than many larger footprint solutions on the market.
Of course, being a young company, its functional coverage still has gaps for certain geographies and industry segments. However, over time, these will certainly be addressed. Inatech has also opted to target what is a highly competitive commodity group in liquid hydrocarbons. But it has gained some traction in recent months, with a number of wins especially in the Middle East, and it is expanding its reach via the opening of new offices in locations like Houston. We will be tracking Inatech closely over the coming months and years to see how the company develops